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Calls for Immediate Interest Rate Cuts and Action on Taxes
OTTAWA, Nov. 22 /CNW/ - Highlighting the impact on manufacturing of the
Canadian dollar's record setting flight over recent months, the head of the
Forest Products Association of Canada (FPAC) urged the House of Commons
Standing Committee on Finance to recommend that the federal government and
Bank of Canada show stronger leadership in addressing the unprecedented and
unchecked rise of the Canadian dollar.
"There should be no illusions - a 64% unchecked rise in our currency
relative to the currency of Canada's largest customer is a disaster for our
economy, its most vital sectors and the hundreds of thousands of jobs they
support. The government must act urgently," said Avrim Lazar, President and
CEO of FPAC.
The dollar has risen by over 60% in the past 5 years placing enormous
pressure on Canada's forest products industry and Canada's manufacturing
sector more broadly. Since 2002, nearly 280,000 jobs having been lost in
Canada's manufacturing sector, including 32,000 jobs in the forest sector.
Correspondingly, Canada's overall business sector productivity growth has
slowed markedly over the past 9 to 12 months, as forest products mills and
other high productivity sectors of our economy have been driven out of
business. In the first 9 months of 2007 alone, Canadian mills have announced
54 instances capacity closure, resulting in the loss of over 6500 jobs.
"Industry appreciates that it needs to be ready to do its part to adjust
to a higher Canadian dollar, but governments must also consider what the
long-term implications of a dollar at parity and beyond are for our economy
and take immediate action. In February of this year, the House of Commons
Industry Committee issued an all party report that contained several important
recommendations that would create a significantly more positive business
climate for Canada's manufacturing sector. Specifically, extending the
accelerated capital cost allowance to 5 years and encouraging innovation by
making the SR&amp;ED tax credit refundable would help off-set the impact of the
dollar's rise. Government should wait no longer to implement these
recommendations," concluded Lazar.
FPAC is the voice of Canada's wood, pulp and paper producers nationally
and internationally in government, trade and environmental affairs. Canada's
forest industry is an $80 billion dollar a year industry that represents 3% of
Canada's GDP. The industry is one of Canada's largest employers, operating in
over 320 Canadian communities and providing nearly 900,000 direct and indirect
jobs across the country.